Long Run Explor Ltd Ord WFREF

Massive Dilution. Bad deal for present shareholders

[PUNJABI]

155 million shares will be issued right of the bat. Then 1/5 @$1.40 &1/5 @ $1.80 that is another 31 million shares x 2 62million shares. Total dilution 217 million additional shares.

Present outstanding shares were only 193 million. Massive dilution for the present shareholders for a total funds of $300m.

The float is going to get very big about 410 million shares when & if all the warrants are exercised.

The good thing is that they will deal with the immediate issue of cash crunch from the placement money. Plus they placement is a very decent price.  

But in the long run present shareholders will pay a heavy price. I think that it was a very bad idea for giving away 53 % of the company for small amount of $300 million.
They should have sold some assets for $200 million.  This is a very bad deal for the present shareholders. The real winner in this deal is Maple Marathon.

There is only hold period of 6 months. If & when the stock goes above $1.40 & $1.80 they can short the stock.

[patenright1]

Looks like Punjabi missed buying and is now bashing the deal. So let me get this straight, brining in $300M for 53% is bad when the entire company just yesterday was valued at a ridiculous $110M, ya sure sounds like a bad deal - you are off your rocker punjabi

[BlueCollar51]

Reality is what it is.   Long Run’s back was up against a wall!   Their options were/are;   Sell assets c/w the current and “future” revenue they produce at “Extreme Fire Sale Prices”. Issue Equity.   For them to raise $200m on the TSX in the current market it would have had to be done at abt. $0.50 / share. The result would have been abt. 400m new shares.   Lone

[tsoprano1]

I agree. I also would add that now we have someone with a lot of skin in the game that will make sure we succeed long term. I suspect eventually we will have a level of support that was missing recently. All things considered I think this is a win-win situation. May not get back to $6 but should get back to $4 more quickly. T

[Boulter]

Hi: I think this is great news.  Someone is offering about $200M for half the company when yesterday the whole company was valued at about $100M.  The reality is that if oil prces get back to where they were when LRE was $6, LRE will only be a $3 stock.  The top end of the price range is gone folks.  If your ACB is over $3 I think you have a permanent loss situation.  I